Need Advice... PLEASE help!

[trader19]

thank you in advance for all the help... i am new to this.

i have about $100k in CC debt spread out over 4 cards.... AAA, AMEX, Citi, United Teletech Federal Credit Union. i know i am a good candidate for chapter 7. i have no assets and my house has no equity.

however, i am worried about preferential payments. some large ones occurred in march paying back family loans. i intended to pay back my CCs next, but i lost my high paying job. i keep seeing different posts about how long before these payments are unrecoverable. some say 1 year, some say 2. i live in new jersey. any idea of what the rule is here?

also, in the meantime, i am not able to make the minimum payments. so, should i at least TRY to work out a deal with the credit cards for a debt negotiation. perhaps see if they would take 30 cents on the dollar. if i could settle 100k for 30k, i probably would, and borrow money from family again. even with the tax consequences. however, another important question... is if i start trying to negotiate with these cards.... can i say to them... "well, if you don't do something, i may have to explore chapter 7?" or would this just tip them off to my intentions and cause them to issue a judgement against me faster.

please, please, please... advice needed!

[dina13]

If you want to settle for 30 cents on the dollar, there might be a way to do it. I personally have not done this as we have no money to settle, and we are filing bk soon. However, I've read an ebook that I got from clickbank that talks exactly about the situation you're describing. It basically describes it as this: you stop making payments on your cards, and save all the money that were going for the payments. You're doing this for six months, calling cards once a month just to let them know you're working on your situation, but can't do much. I guess that keeps them from selling off your debts early on. Between 5th and 6th month you call them and negotiate settling your accounts in full (if you have the money) for one third to one half of the amount.
Just sharing info here, don't have personal experience with that.

[trader19]

right now, i am getting 3 calls a day from AMEX. nothing from the others. and i have simply taken the position of not picking of the phone. is it bad for me to talk to them? i just don't want to say anything to screw up a future potential bankruptcy.

[dina13]

When we started getting calls, we just turned off the phone - didn't answer them, didn't do anything, didn't even open mail from them for some time. We lived like that for a year and a half, and only now one of the cards sent us summons, so we're filing bk. However, our situation might be different than yours, since we had relatively small amounts on numerous cards, and we both are self-employed, so they can't garnish our wages.

[keepsmiling]

Google Voice will save your sanity while you make up your mind. Go get it NOW and change your phone numbers while you still have online access.

With only 4 cards, you may have a chance of settling, although most here will tell you not to. I have gotten some pretty good offers, as low as 13%. No one will settle til you are behind. Meanwhile, go make a few appointments and see what some lawyers tell you.

Good luck from a fellow Garden Stater. Keep us posted.

[TheBajan]

Welcome!! I would never tell a creditor that I'm considering BK. They will use it to harass you even further and may suggest that you are committing fraud (not the case but they can rattle your cage with the info). We paid our creditors right up until we just couldn't anymore and then we filed 3 months later. We were getting phone calls from 8am till late at night. We never answered them. Eventually, we just shut the phone off completely until after we filed. Just before we filed, when we were 3 payments behind, Citibank sent us a letter regarding one of our accounts with them (we had three) offering to settle the debt for about .60 on the dollar. We didn't respond. I've never been six months past due on anything but from what I understand they will be willing to settle for much less as more time goes by. DON'T get sucked into some scheme where you pay someone else to settle your debt and never give a creditor permission to make automatic withdrawals from your bank account. Always get your agreement with them in writing before you send them any money and then pay them with a money order rather than a personal check. Keep all your documentation FOREVER regarding the settlement. If you decide that BK is the right option for you, this is a great place to find answers. Everyone here is kind, informative, and encouraging.
Best wishes,
The Bajan

[trader19]

one of the reasons i would look to settle is for the sake of my marriage. about 12 months ago my gambling got out of control. i pretty much lost my mind and spent a year compulsively gambling. i have since stopped in feb after realizing what i had done. two of the cards i used for online gambling with 10's of thousands of deposits and credits on each. my job was still paying great so i figured i would just pay off my losses. the last 3 months i made payments to the cards. then this month, i lost my job. i am the only one that knows about these losses and i would rather work really hard to pay off the problem i caused and possibly negotiate with the cards... rather than to have all these skeletons come out of the closet in a formal meeting. i am assuming since the debt is in both names, my wife would have to come to the meeting. also, i know there is a question about gambling losses on the paperwork somewhere... how much time would i have put between my last wager and disclosing this on the paperwork or at the meeting. any help would be appreciated!

[Floridagail]

Please do not borrow to pay these debts. You are not the only people who ever gambled and lost. I would not worry about that. settling will still effect your credit for years also, You will then owe IRS taxes, It is a nightmare starting. This is a business decision you must make. I would let some time go by before filing since you paid back relatives, just do not answer the phones. I waited 18mos to file and then it was because I was starting to be sued by Cap One, I had 11 debts, they were only one to sue me. You may not get sued. Just wait. If you get served then be ready to file. I had a 5000 gambling win on my tax forms, the trustee just ask me if I had won any other money, I said no, meaning none I had to report to IRS. That was it. They only have 5 mins to talk with you, that is least of their worries they are looking for assets mostly. Go see attorney and just be ready to file.

[trader19]

ok, so my next question would be... why when the sue me to i have to file then? if they get a judgement... i have no cash.... is the only thing they can do is garnish wages? our yearly income will be about $50,000 gross on W2s. but i still make about $35,000 gross being self employed. how much can they garnish that for. i only ask all of this because i am 45 days late on AMEX and get 3 calls a day already. i doubt they are gonna wait 18 months to sue. especially since i owe them $25k and 3 other cards 75k each. not sure how long i can hold them all off for.

[keepmine]

i am assuming since the debt is in both names, my wife would have to come to the meeting. also, i know there is a question about gambling losses on the paperwork somewhere... how much time would i have put between my last wager and disclosing this on the paperwork or at the meeting. any help would be appreciated!

She wouldn't need to be at the 341 unless, you filed a joint petition. However, if he debt is joint a bk will wipe it out for you but, she'd still be responsible.
From the threads you've started, you don't have a routine run of the mill bk. You better get yourself to a lawyer ASAP and get all of your options explained.

[ValleYum]

About the preferential payment to an insider - this is a snip of Form B7 Statement of Financial Affairs - Item 3c:



It looks like 1 year is the magic number.

Also, on the same form - Item 8 - you must disclose any gambling losses within the last year as well:



Honestly, your wife probably has a good idea about the debts and gambling... and may be just too worried to talk to you about it. You may just be surprised at the support you get from her. The fresh start that a bankruptcy would offer you may just be a GOOD thing. Doesn't the old saying go something like: 'the truth shall set you free'?

No judgement from me AT ALL but the stress of worrying and borrowing and fibbing has got to be getting to you. I know it would for me.

So, to me, it looks like you need to make it 10 months until you can file a BK with no preference or gambling issues. Don't totally ignore creditors, verify your address and contact info and tell them you lost your job and you are trying to figure things out. Hopefully, you can string them along for a while.

Go make some free consultation appointments now with several local BK attorneys. This could help you decide the best plan for your situation. People here can and will give advice, good advice, too - but local attorneys know what you need to worry about with your local trustees and court.

Good luck. Keep in touch.

[Floridagail]

If they sue you and get a judgement and thru that ,they request thru the court copies of your bank accounts ,retirement etc, They then freeze your bank accounts, ( they cannot touch retirement) and your garnish paychecks if you have any. I was judgement proof also, had no paychecks only pension checks. The garnishment laws are different with every state, some states do not allow it, if you have family. As far as being sued, You are one of Thousands of people who have defaulted, it could take time to sue you. I owed BOA 18,000, they never sued me. This site had excellent info to research and study about bankruptcy. But I would suggest go see a attorney that has free first visit. Explain your income, assets and see if you should file. My attorney told me not too, but I wanted to be rid of it all and have fresh start. I did not want my personal info to go to the creditors attorney

[trader19]

valleyum (and to all others)... thanks for your help. i went and met with a bankruptcy attorney a few weeks ago who i asked about paying back my mom a loan that i took a week earlier for $15,000. he was like, "shouldn't be a problem". i went home a researched it... and was like... that is a preferential payment... how did he not know that!!! so, now, before i meet with any other BK lawyers, i want to know everything i can. my 2 biggest concerns are 1. the preferential payments, which are substantial because i was running a few businesses and using family/friends as cash lifelines until money came in... and then would pay them back. and 2. the gambling, which i don't want to have to address. the last time i paid family back and/or gambled was Feb of this year. so, i am 8 1/2 months away from the 1 year mark.

so, valleyum... i bookmarked a site that has all the BK forms. where would i find question 8. i just want to see the wording for myself.

also, if they look at my CC history... they will see about 50 $2k payments to an offshore sportsbook. and 25 $2k refunds. they stick out like a sore thumb. even after a year... aren't they gonna ask me about it?

thanks.... SOOOOOOOO much for your help.

[ValleYum]

<snip>1. the preferential payments, which are substantial because i was running a few businesses and using family/friends as cash lifelines until money came in... and then would pay them back.

I thought you mentioned March as the last time you paid the credit line back? That would make it 10 months to not have a preferential payment.

and 2. the gambling, which i don't want to have to address. the last time i paid family back and/or gambled was Feb of this year. so, i am 8 1/2 months away from the 1 year mark.

Keep up the good work.

so, valleyum... i bookmarked a site that has all the BK forms. where would i find question 8. i just want to see the wording for myself.

You want to look at item 3(c) and item 8 and possibly item 10. Here is the link to the Statement of Financial Affairs form straight from the UST website:

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Official_2010/B_007_0410.pdf

also, if they look at my CC history... they will see about 50 $2k payments to an offshore sportsbook. and 25 $2k refunds. they stick out like a sore thumb. even after a year... aren't they gonna ask me about it?

After a year has passed? I don't think so but you just never know. Time is your friend, though. You don't want the credit card people to file an AP or anything. BK Lawyers in your area can help you through your worries about this. Make several appointments for free consults!!

If the Trustee asked you why you are filing BK, you could say "Poor Personal Choices and Job Loss" and that would be honest, right?

thanks.... SOOOOOOOO much for your help.

Hope this helps.